Barbados payroll guide · 2026-10-19
If your Barbados payroll still withholds tax at 12.5% and 28.5%, it is out of date. For the 2026 income year the Barbados Revenue Authority (BRA) reduced both PAYE rates by one percentage point, and the Revenue Commissioner has asked payroll personnel to adjust their systems so the correct tax is deducted. This guide sets out what changed, what did not, and how to check that your payroll is right.
The BRA's Policy Note OGC No. 001/2026 sets the following rates for the 2026 income year and beyond:
Annual income — Previous rate — 2026 rate
Up to BBD 25,000 (standard personal allowance) — Nil — Nil
BBD 25,001 to BBD 75,000 — 12.5% — 11.5%
Over BBD 75,000 — 28.5% — 27.5%
Put another way, the top rate now applies to taxable income above BBD 50,000 after the BBD 25,000 allowance. Monthly, that band break falls at BBD 4,166.67 of taxable income. Pensioners aged 60 and over, non-residents and employees with other deductions or benefits-in-kind need individual treatment, so confirm each case against BRA guidance.
The National Insurance and Social Security Service (NISSS) confirms that the insurable earnings ceiling for 2026 is BBD 5,360 per month (BBD 1,238 per week), and that contribution rates remain unchanged. For private-sector employees of working age:
Core NIS — Resilience & Regeneration Fund — Total
Employee — 11.00% — 0.25% — 11.25%
Employer — 12.75% — 0.25% — 13.00%
The detail that trips up many payrolls: the core NIS rate is capped at the ceiling, but the Resilience and Regeneration Fund is calculated on gross pay with no ceiling. Workers at or over pensionable age, and those under 16, fall into a separate category with lower contributions, so age needs to be tracked.
Assume a resident employee, standard allowance, no other deductions or benefits.
Item — Calculation — BBD
Gross pay — 6,000.00
NIS (employee) — 11% × 5,360 — 589.60
Resilience Fund (employee) — 0.25% × 6,000 — 15.00
Taxable income — 6,000 − 2,083.33 (allowance ÷ 12) — 3,916.67
PAYE — 11.5% × 3,916.67 — 450.42
Net pay — 4,944.98
Employer cost on top: NIS 12.75% × 5,360 = 683.40, plus Resilience Fund 0.25% × 6,000 = 15.00, a total of BBD 698.40 per month.
For an employee on BBD 12,000 per month, the same method gives PAYE of BBD 2,060.42, compared with BBD 2,159.58 at the old rates, about BBD 99 less per month. Employees will notice this, so payroll should get it right.
Tax withheld each month must be paid to the Revenue Commissioner on or before the 15th day of the following month. NIS and Resilience Fund contributions are submitted to NISSS, which accepts online submissions. Check NISSS guidance for its current filing and payment schedule.
Leaving the old PAYE rates in place. Under-deducting 1% is an easy way to create an employee under-withholding problem that surfaces at year end. Over-deducting creates refunds and unhappy staff.
Applying the NIS ceiling to the Resilience Fund. The ceiling does not apply to the 0.25%. High earners are the ones affected.
Missing the January ceiling update. The 2026 monthly ceiling is BBD 5,360. Check it every January.
Ignoring age categories. Contribution rates change at pensionable age, so employee dates of birth need to be in your system.
Filing late. Payroll can be perfectly calculated and still attract interest and penalties if it is remitted after the 15th.
Every rate change means finding the notice, editing the formulas and re-checking every payslip. PayTime, from Zettaz Global, supports Barbados payroll, with NIS, the Resilience and Regeneration Fund and PAYE handled in the pay run, so statutory rules live in the system rather than in your head.
Run your next Barbados payroll with confidence.
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Rates and figures are taken from the Barbados Revenue Authority (Policy Note OGC No. 001/2026) and NISSS (nis.gov.bb) as at October 2026. Always confirm current rates with the relevant authority before processing payroll.